Pesko Urges Printers To Leap the "Digital Divide" So They Can Be Right Where the POD Action Is By Patrick Henry, Executive Editor, WhatTheyThink April 25, 2007 -- Charlie Pesko, president of InfoTrends, set the tone for On Demand with an opening day (4-17) keynote on the rich opportunities that await printers ready to embrace the new realities of what he has long described as "the fastest growing segment of the printing & publishing market"—digitally enabled print on demand (POD). In a mature market for print, said Pesko, overall page volume is not growing. Digital technology, moreover, continues to break down walls between historical market segments, admitting new competitors in every market segment. As this new market structure emerges, he said, printers can no longer depend on ink or toner on paper to make a living. Video: Charlie Pesko is interviewed live at On Demand by WhatTheyThink Keynote: View Charlie Pesko's keynote slides (918 KB pdf) Instead, they must concentrate on adding value to the documents they produce so that the total cost of ownership is perceived as the total value of ownership. Value can be added to documents by making them more personalized, relevant, secure, impactful, and memorable. Improved ROI and faster turnaround are among the beneficial outcomes of enhancing the value of documents in this way. Catch Those CAGRs Pesko described POD as an increasingly global market in which the value of equipment, service, and supplies is enjoying a compound annual growth rate (CAGR) of 10.2%. Even brisker is the pace of growth in the U.S., where Pesko projected the retail value of the POD market to be $73.3 billion by 2011 at a CAGR of 11.2%. In the U.S., the variable data printing (VDP) segment will grow faster still, riding a 27% CAGR to reach $14.9 billion by 2010. Pesko noted that this blooming growth forecast does not apply to black & white production copying and digital printing, which said would slip into negative CAGR over the next few years. On the other hand, what he called "the color tornado"— POD color volume growth driven by technical advances and continuing price declines—will create a whirlwind of demand for digitally produced direct mail, on-demand books, transpromotional documents, and photo printing. photo printing Also getting under way, according to Pesko, is the "inkjet onslaught"—the capture of POD market share by high-speed, high-quality digital inkjet devices even though their impact on production document market to date has been relatively small. How are printers to manage these fundamental shifts to their advantage? Pesko said they need a business strategy that includes a marketing plan and a commitment to consultative selling. Equipment vendors can help to grow the market by providing business development tools and monitoring printers’ volume growth. Growth in POD will go hand in hand with progress towards workflow automation, according to Pesko said. He said it was vital to connect production workflow and print MIS in order to reduce error rates and cut turnaround time. As Web-to-print solutions "go mainstream" in 2007, Pesko continued, e-procurement will become the norm for print buying. Vendors will hasten the transition with tighter integration of Web-to-print, variable data printing (VDP) and MIS applications. Which Side Are You On? Pesko emphasized that only printers on the correct side of "the digital divide" can properly grasp the implications of these changes for their business. These printers will understand, he said, that "when you add value to documents, you increase profits." They also will realize that "every time a human touches a job, you lose profit." The bottom line is that POD impressions generate higher margins than other impressions. Thus, said Pesko, it’s prudent to focus on producing volume-rich POD applications such as books and manuals, direct mail, and print tied to fulfillment. "Those on wrong side of the divide will be at a competitive disadvantage," Pesko warned. "You must determine which new areas you play in and how you will add value to documents. You must invest in digital workflow and deploy digital solutions sets that address entire process from acceptance to billing." Please offer your feedback to Patrick. He can be reached at [email protected]